New investment rules for UIFs
The Bank of Russia has expanded the list of instruments that management companies may invest in using the assets of retail unit investment funds (UIFs). The relevant ordinance has been registered by the Russian Ministry of Justice and will become effective 10 days after its official publication, except for certain provisions.
A wider range of unlisted instruments will be available to retail UIFs. Currently, they may purchase investment units of open-end UIFs, bonds of Russian companies engaged in projects promoting Russia’s technological sovereignty and the structural adaptation of the economy, and substitute bonds. The ordinance will allow them to include any shares and bonds of Russian issuers and investment units not intended for qualified investors in their portfolios. Nevertheless, the proportion of unlisted assets in a UIF’s portfolio is limited.
UIFs will also be able to invest qualified investors’ funds in cash-settled cryptocurrency derivatives.
Furthermore, the Bank of Russia has revised the method of calculating concentration limits for retail UIFs. Specifically, while a company’s assets could previously account for 10% of a fund’s portfolio, this limit now applies to the entire group of affiliated organisations. This rule will become effective in a year. At the same time, the ordinance provides for a two-year transition period for management companies of already existing funds to bring them in line with the new requirements for the asset structure.